Comments
Commerce and Industry Minister Nirmala Sitharaman discussed the possibility of allowing foreign direct investment (FDI) in both e-commerce and brick-and-mortar multi-brand retail trade in a meeting with Industry Ministers from various State Governments on Wednesday.
The issue of taxation problems faced by e-commerce companies in Karnataka, Kerala and Maharashtra was also taken up.
“States will now mull over the proposals and there will be a follow-up meeting next month to take the issues forward,” an official who attended the meeting told reporters. The States have been given 15 days to respond.
The Centre, which has been looking at the possibility of allowing FDI in business-to-consumer segment of e-commerce, is also faced with demands from large brick-and-mortar retail owners to allow foreign investments in the sector.
In a meeting with industry stakeholders last week on opening up the e-commerce sector, the Retailers Association of India (RAI) asked the Department of Industrial Policy and Promotion (DIPP) to stop discriminating against them and also allow them to source foreign funds.
The brick-and-mortal retailers are unhappy as India allows foreign investment in business-to-business e-commerce and the market-place e-commerce model where retailers provide a platform for various vendors to sell their products.
The RAI argues that the limited permission for FDI in retail distorts over-all retail trade in the country and results in a raw deal for them.
Although India’s FDI laws allow 51 per cent foreign investment in brick-and-mortar retail, the BJP Government has refused to clear proposals as it does not want to upset the trading community, which is an influential vote-bank for the party.
However, now with the country facing pressure even from its trading partners to open up the e-commerce sector in the various free trade pacts it is negotiating, the Centre is seriously looking at allowing FDI in the sector.
Infra pushThe Commerce Ministry also asked States to expedite infrastructure development process and formulate a trade policy to boost exports and encourage manufacturing.
Commerce Secretary Rita Teotia discussed issues related to refund of local taxes to exporters, appropriate infrastructure for business and the regulatory environment with senior officials of States.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.